He transformed the game after the visitors threatened a fifth away win.
Madden came off the bench on the hour as part of a double change which also brought on Kevin Van Veen.
The two made an almost instant impact, combining for the 66th-minute equaliser.
Van Veen found room in the box to get in a shot that keeper David Martin could not hold and Madden raced in to apply the finishing touch from close range.
He then fired Scunthorpe in front in the 81st minute, sweeping his shot low into the bottom far corner from an inviting low cross from the right by Josh Morris.
The home side had started on the front foot and were almost gifted a second-minute lead when Martin fumbled a shot from Duane Holmes against his own crossbar.
Martin was the central figure again in the 11th minute when the home side had strong appeals for a penalty turned down when striker Tom Hopper appeared to be floored in the box by a high challenge from the keeper.
MK Dons, with one of the best away records in the Football League, weathered the early storm and snatched a 37th-minute lead when poor defending down Scunthorpe's right flank freed Ben Reeves to deliver a low cross into the box which was turned home by striker Kieran Agard.
They comfortably held that lead until Madden and Van Veen changed the game.